High street shops will track your phone to ping you the best deals

This article was taken from The WIRED World in 2016 -- our fourth annual trends report, a standalone magazine in which our network of expert writers and influencers predicts what's coming next. Be the first to read WIRED's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.

Take a stroll down the one-kilometre-long shopping strip of Regent Street in London, and more than 100 of its flagship stores -- from Banana Republic to Gap, Hamleys and Burberry -- will be silently pinging your smartphone as you walk past.

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If you download the Regent Street shopping app (iPhone only, for now), these Bluetooth-enabled pings will pop up as messages with targeted deals, discounts and promotions -- just because you happen to be in the neighbourhood. As WIRED walked by, we received a reminder for a Banana Republic sale and an offer to win a Mappin & Webb necklace.

The Regent Street stores are using beacons to communicate -- tiny, low-energy chips housed in a discreet plastic case, which can beam data to your smartphone, based on Bluetooth positioning. (For those worried about privacy infringement, these devices can't receive or store anything, and an opt-in companion app is usually needed to push notifications to you.) These sensors are the real-world equivalent of pop-up ads that target our interests based on the websites we visit, and so link the two worlds.

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When Regent Street launched a beacon programme for 120 stores in summer 2014, it was the first full shopping route in Europe to trial the technology on a large scale. "Integrating mobile and online platforms with physical retailing provides the kind of tactile experience shoppers value," says Bob Dawson, head of asset management for The Crown Estate's Regent Street portfolio. "We are taking a leading role in this globally."

In the US, more than 30 percent of the top 100 retailers, including American Eagle Outfitters, Macy's and Urban Outfitters, had already deployed beacons in-store, and another 20 percent were trialling them in 2014. Research from information service BI Intelligence projects that this figure will rise to 85 percent by the end of 2016. It also predicts that beacons are expected to directly influence $4 billion (£2.5 billion) worth of sales in the US in 2015, and potentially increase by tenfold by the end of 2016.

San Francisco-based startup Shopkick is both a hardware and software business in this growing sector -- it produces beacon chips as well as a dedicated shopping app. "Our beacons stick to a wall and have a battery life of five years, and can send out about ten signals per second," says Cyriac Roeding, founder and CEO of Shopkick. "Apple's iBeacon technology is the format of how you send messages via a beacon." iBeacon, which Apple rolled out in November 2013, allows alerts to be sent via beacon to any smartphone, not just iOS, and can be targeted precisely to specific areas of a store, such as the tills or changing rooms.

Shopkick, acquired for over $200m last September by South Korean giant SK Planet, has built one of the largest beacon networks in the retail world, and has 14 million app downloads, according to Roeding. "We launched in 2010, and are now live with 14,000 retailers in the US, Germany and South Korea," he says. "In 2016, we are going into a massive roll-out phase in Europe, Asia and the US."

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The startup, which works with 200 brands including Procter & Gamble, Disney, Sony and Unilever, announced in late 2014 that sales by brick-and-mortar businesses using the Shopkick mobile app, shopBeacon, exceeded $1bn. "We have clear data from third-party research studies that show Shopkick drives between 50 to 100 percent more store visits once we offer a reward for visiting," Roeding says.

And it's not just startups that are jumping on to the mobile-ad targeting bandwagon: in 2015, Facebook and Twitter both stepped in. Facebook gave out free beacons to all US stores willing to trial Place Tips, a new Facebook feature which shows its users posts and photos about a specific retailer or business when they open Facebook on their smartphone, when in the actual store. Twitter participated in an $18m funding round for Boston-based beacon marketing startup Swirl, which has beacons installed in stores such as Lord & Taylor and Timberland. "Every significant retailer will install beacons if they want to be a player, because it bridges the online and offline worlds," says Roeding. "We're going from the phase of roll-out to requirement."

Madhumita Venkataramanan is head of technology at Telegraph Media Group